Controlling Price Swings with Slippage Tolerance on Market Orders

When you place a market order in volatile conditions, price movements between order submission and execution can work against you. That’s where slippage tolerance comes in—a powerful feature that lets you set acceptable price boundaries for your trades. Whether you’re trading Spot, Spot Margin, or Futures, managing this price tolerance ensures your orders fill within your comfort zone rather than at whatever price the market serves up in the moment.

Slippage tolerance is essentially your insurance policy against unexpected price jumps. By setting a maximum deviation—either as a fixed amount or percentage—you maintain control over execution quality and predictability. This feature transforms standard market orders into intelligently bounded executions that balance speed with price protection.

What Is Slippage Tolerance and Why It Matters

In fast-moving markets, a standard market order executes immediately at whatever price is available, which can mean significant deviation from the quoted price—especially in low-liquidity pairs. This deviation is slippage, and it directly eats into your profits or inflates your losses.

Slippage tolerance addresses this by letting you define acceptable price ranges. When enabled, your market order behaves like a hybrid between a market and limit order: it executes with market speed but only if prices stay within your specified tolerance band. Any portion of the order that would execute outside this range gets canceled rather than filled at unfavorable prices.

The feature is now available across Spot, Spot Margin, and Futures trading, giving you consistent price protection across all trading modes.

Core Benefits for Different Market Conditions

Improved Execution in Thin Markets Low-liquidity Futures contracts are particularly prone to excessive slippage. Slippage tolerance smooths out these rough executions by refusing to fill at extreme prices, effectively protecting you against sudden market dislocations that would otherwise slip your order significantly.

Speed Without Sacrificing Price Quality Traditional limit taker orders based on Ask1 and Bid1 prices can be slow to fill, waiting for the market to come to your price. Slippage tolerance offers the execution speed of market orders with the price discipline of limit orders—you get immediate processing without gambling on whatever the next available price happens to be.

Safeguard Against Extreme Price Spikes Market orders are vulnerable to flash crashes and sudden liquidity gaps. With slippage tolerance enabled, these extreme events simply won’t fill your order—the order either executes at reasonable prices or doesn’t execute at all, keeping you safe on the sidelines rather than catching a falling knife.

Two Ways to Set Your Slippage Tolerance

Once you’ve decided to use slippage tolerance, you can configure it two ways depending on your preference and market conditions.

By Fixed Amount

This method sets tolerance as an absolute price deviation from the current Ask1 (for buys) or Bid1 (for sells).

The calculation is straightforward:

• Buy Orders: Limit Price = Ask1 + {amount}
• Sell Orders: Limit Price = Bid1 − {amount}

Let’s say you’re trading ETH/USDT. The Ask1 is currently 2,100 USDT and Bid1 is 2,000 USDT. You set a tolerance of 0.1 USDT. Your order limits become:

• Buy orders will execute only if the market price reaches 2,100.1 USDT or lower (2,100 + 0.1)
• Sell orders will execute only if the market price hits 1,999.9 USDT or higher (2,000 − 0.1)

Any portion of your order that would fill beyond these limits simply gets canceled. This approach works best when you know the exact price range you’re comfortable with.

Special Note: For BTC and ETH, amount-based tolerance is your only option; percentage-based tolerance isn’t supported for these major pairs. Also, your specified amount will always be denominated in the settlement currency (USDT in the example above).

By Percentage

This method scales your tolerance as a percentage deviation from Ask1 or Bid1, making it adaptive to different price levels.

The calculation uses this formula:

• Buy Orders: Limit Price = Ask1 × (1 + {percentage}%)
• Sell Orders: Limit Price = Bid1 × (1 − {percentage}%)

Using the same ETH/USDT example with a 0.5% tolerance:

• Buy orders execute only if the market reaches 2,110.5 USDT or lower [2,100 × (1 + 0.5%)]
• Sell orders execute only if the market hits 1,990 USDT or higher [2,000 × (1 − 0.5%)]

Percentage-based tolerance is useful when you want consistent price protection across different trading pairs and price levels. A 0.5% tolerance on a $10,000 order preserves the same proportional protection as a 0.5% tolerance on a $100,000 order.

Important Caveat: Full execution isn’t guaranteed. If market depth is thin and insufficient liquidity exists within your tolerance range, only the portion that can fill within your bounds will execute; the rest gets canceled. Your slippage tolerance effectively sets a ceiling on acceptable price, not a guarantee of full fill.

Setting Up Slippage Tolerance: Step-by-Step Guide

Getting slippage tolerance working takes just three steps.

Step 1: Access the Trading Interface Navigate to the trading page and select your desired trading pair. On the right panel, choose whether you’re buying or selling, select Market as your order type, and enter either your order value or quantity (just like placing a regular market order).

Step 2: Enable and Configure Tolerance Check the Slippage Tolerance checkbox. A dropdown menu will appear letting you switch between By Amount and By Percentage depending on your preference. As you input your tolerance value, the interface displays real-time market depth and whether your order is expected to fill completely at the current market state.

Step 3: Confirm and Execute Click Buy or Sell to bring up the confirmation popup. Review all the order details, including your tolerance settings, then click Buy or Sell again to submit. Your market order with slippage tolerance is now live.

Automatic Settings Persistence: The system remembers your tolerance settings and automatically applies them the next time you visit the trading page, so you don’t need to reconfigure every trade if you maintain consistent preferences.

Tracking Your Orders and Slippage Settings

After you’ve placed orders with slippage tolerance, finding them and reviewing their settings is simple.

Via Order History on Trading Page On the trading page itself, scroll to the Order History section at the bottom. Hover over any order to instantly see its slippage tolerance settings.

Via Navigation Menu Alternatively, click Orders at the top right of the navigation bar to access your complete order history. Hover over any order here to view its tolerance configuration.

For Futures Traders: You can also enable slippage tolerance when using Market Close orders, setting either a percentage or amount tolerance just as you would for regular market orders.

Important Limitations and Exceptions

Keep these restrictions in mind when working with slippage tolerance:

• Slippage tolerance is disabled by default. You must explicitly enable it for each session or configure it as your preferred default.
• Not supported for certain order types: OCO orders, Conditional orders, and Trailing Stop orders cannot use slippage tolerance. These specialized order types follow their own execution logic.
• Fixed pairs limitation: BTC and ETH support only amount-based tolerance, not percentage-based, due to their special handling in the system.

By understanding these boundaries and using slippage tolerance strategically, you transform market orders from gambles on final execution price into controlled trades that protect your entry and exit points.